Gulf Carrier RAK Mulls Boeing, Airbus or Bombardier Deal

July 23 (Bloomberg) -- RAK Airways, based in the northern
Gulf emirate of Ras Al Khaimah, said it’s in talks with Boeing
Co., Airbus SAS and Bombardier Inc. about an order for at least
10 single-aisle aircraft to meet expansion plans.

State-backed RAK is looking at the existing versions of the
Boeing 737-800 and Airbus’s A320, together with the new CSeries
jet from Canada’s Bombardier, and aims to make a choice by the
end of this year or early in 2014, Chief Executive Officer
Murabit Al Sawaf said in an interview in the sheikdom.

RAK is seeking to carve out a niche in one of the world’s
most competitive aviation markets, with the United Arab Emirates
home to five separate airlines operating full-size jets, four of
them offering short-haul services. The carrier, which began
flying in 2007 before suspending scheduled operations during the
global slump, plans to expand its network to 40 cities by 2015.

“Ras al Khaimah is growing in an aggressive way, so we
should be as aggressive as the government,” he said. “In five
years I want the company to be one of the major airlines in the
region. In five to 15 years we’ll be on a curve to go upwards to
have a worldwide position and international identity.”

Traffic Boost

RAK Airways currently serves nine cities including Cairo,
Doha in Qatar, Kathmandu in Nepal, Jeddah in Saudi Arabia and
Chittagong in Bangladesh using two A320s and two 737-400s. The
carrier attracted 300,000 customers in 2012, predominantly
migrant workers and tourists, and is targeting a profit in 2014
after boosting the first-half passenger count 40 percent.

While delivery positions for current-version single-aisle
planes are fast filling up as Airbus and Boeing transition to
re-engined Neo and Max models, Al Sawaf said he’s confident of
sourcing aircraft for delivery from 2015.

“There’s always a way,” he said, adding that some
carriers that have placed large narrow-body orders may cancel
part of their commitments, shrinking the backlog.

To meet immediate expansion plans, the company has signed a
deal with International Lease Finance Corp. to take an Airbus
A319 and crew in two weeks and an A320 in two months.

Destinations to be added in 2013 include Amman in Jordan,
its first route to the Levant, and Islamabad, the carrier’s
third destination in Pakistan, where 600,000 expatriate workers
in the U.A.E originate, both to be served from August. Services
to the Saudi cities of Riyadh and Dammam will follow.

“It’s the right time,” Al Sawaf said. “The potential
here, especially the Middle East and Far East, the booming we
see, compels us to keep up with the development.”

The carrier will need external funding for the planned
order and has kept all options open, including bank loans,
manufacturer financing and a bond issue, the CEO said. The
airline could consider a share sale in the future, he added.